PHNOM PENH (Reuters) - As investment in Cambodia’s textile industry surges, so is labour unrest, putting pressure on suppliers to the world’s big garment brands to raise wages and improve sometimes grim conditions in one of the last bastions of low-cost factories.
Hundreds of angry workers rampaged this week through a textile plant in Cambodia that supplies U.S. sportswear company Nike Inc, clashing with police over their demands for a pay hike.
The violence came just weeks after over 1,100 workers were killed in the collapse of a building housing garment factories in Bangladesh, another impoverished Asian nation where mass-produced textiles are the biggest export earner.
Cambodia is considered one of the better locations in the world for low-cost garment manufacturing with the International Labour Organisation (ILO) monitoring pay and working conditions at many factories.
But strikes and sometimes violent protests have been on the rise as unions emboldened by a shortage of skilled workers press complaints that companies have failed to raise wages enough or improve safety.
Strikes by the country’s more than 300,000 garment workers nearly quadrupled last year to 134, according to the Garment Manufacturers Association of Cambodia, the main industry body. The 48 strikes so far this year are already more than in the whole of 2010 or 2011.
“Supply of skilled workers is a problem,” said Kaing Monika, a business development manager at the Garment Manufacturers Association of Cambodia (GMAC), the main industry body.
“Most existing factories are running at full capacity.”
Nike was the latest big brand to face protest action at its Cambodia-based suppliers in recent months, joining H&M Hennes and Mauritz AB, Wal-Mart Stores Inc, Gap Inc, and Puma SE among others.
The international brands buy garments from local manufacturers and do not have direct control over pay or working conditions. But the major companies have signed to the ILO scheme aimed at ensuring suppliers meet legal requirements on wages and work conditions.
The garments industry has become by far the country’s biggest export earner, with shipments up 10 percent in 2012 to $4.44 billion.
Until this year, the minimum wage in the textile sector was $61 a month, compared to $38 in Bangladesh and more than $150 in China. The government raised it in March to $80, including a health care subsidy, but strikers at the Nike factory and other workers complain that wage rises have not kept up with costs.
“Life is hard, we have a lot of expenses with a low wage. Sometimes, we just borrow money from other workers,” said 28-year-old Mao Pov, one of those on strike at the Sabrina Garment Manufacturing plant that supplies Nike as well as privately held Wilson Sporting Goods Co.
Inflation in Cambodia was 3 percent in 2012, which is low for developing nations in Asia, although many workers complain the price of basic items has risen faster.
Sweden’s H&M, the world’s second-largest fashion retailer, said a general election scheduled to be held in July had caused some instability among workers at plants run by its Cambodian suppliers.
“This being an election year, the situation in the country was generally more disorderly than usual during early spring,” said spokeswoman Andrea Roos. After minimum wages were increased, “the situation on the labour market in Cambodia has been more stable”, she said.
Workers at the Nike-linked plant first went on strike on May 21 even though the factory had raised their minimum wage. The union on strike says that the health and other benefits that were previously paid separately were folded into the new wage, and is demanding another $14 hike.
A spokeswoman for Nike told Reuters last week that compensation at the Cambodian plant was the responsibility of the factory, but that Nike was in “close contact” with the factory and would “continue to monitor the situation”.
The Southeast Asian nation’s textile industry has often been touted as a model for fair production because of the ILO’s Better Factories Cambodia (BFC) program that has monitored factories there for more than a decade.
But union leaders and activists say the program has masked a deterioration in workers’ rights as factory owners have taken advantage of the BFC’s lack of enforcement powers and responded to pressure from buyers for ever lower prices.
Factories regularly violate union rights and exceed legal limits on overtime work, a report by Stanford Law School’s International Human Rights Clinic released in February found. The BFC found evidence of sharply worsening fire safety standards at factories in its most recent report this year.
In May, two workers were killed at a factory making running shoes for Asics Corp when part of a warehouse fell in on them at a company that was not part of the ILO program. Thousands of workers have been taken sick in mass fainting incidents in recent years — including at the Sabrina factory — a phenomenon that has been blamed on a combination of poor nutrition, long working hours and poor ventilation.
“The brands cannot hide behind the ILO,” said David Welsh, country director at Solidarity Center in Phnom Penh, which advocates for worker rights.
“If the brands are not pressuring factories to improve, they are not going to improve because everybody is out to make as much money in the industry as they possibly can.”
Writing by Stuart Grudgings; Editing by Jason Szep and Raju Gopalakrishnan